On the Distribution of Likelihood Ratio Test Statistics for Cointegration Rank

This paper analyses the likelihood ratio test for the hypothesis of reduced cointegration rank in a Gaussian vector autoregressive model. The usual asymptotic distribution typically gives rather large size distortions. This is explained by the fact that the asymptotic distribution of the likelihood ratio test statistic varies across the parameter space. A much improved distribution approximation can be obtained using local asymptotic theory. The idea is discussed for some low dimensional examples.     

Transportation Hardship: Are You Better off with a Car?

Growing evidence demonstrates the importance of transportation in improving family economic well being. This article sheds light on the hardship that one important transportation asset, private vehicles, may exert on families. Data from the Iowa Transportation and Employment Survey provided a unique opportunity to understand how vehicle access enables households to meet their basic needs, but may exacerbate their problems through the creation of additional demands on resources. Approximately 26% of the sample reported having experienced transportation hardship. The strongest predictors of transportation hardship were the presence of children in the household, low income, driving less reliable vehicles, and the unavailability of transportation assistance from someone outside the household. How to help families meet their transportation needs in light of this evidence remains open to debate.     

Global QUALITY OF LIFE (QOL), health and ability are primarily determined by our consciousness. Research findings from Denmark 1991–2004

Objective: To explain the global quality of life (QOL) from 2000 indicators representing all aspects of life. Design and setting: Two cross sectional population studies, one prospective cohort study and one retrospective cohort study. Participants: (1) Representative sample of 2500 Danes (18–88 years), (2) 7222 members of the Copenhagen Perinatal Birth Cohort 1959–1961 (31–33 years), (3) 9.006 mothers and their 8820 children born in Copenhagen 1959–1961, (4) 746 Danes (55–66 years). Main outcome measures: Global QOL measured by SEQOL (self evaluation of QOL) containing eight global QOL measures: Well-being, life-satisfaction, happiness, fulfilment of needs, experience of temporal and spatial domains, expression of lifes potentials and objective factors. Results: 2000 associations; strongest between QOL and health, ability, the personal philosophy of life, the relationships to oneself, the partner and friends; weakest between QOL and 1000 early life factors, 1000 life events and 100 objective factors like income. Conclusions: Quality of life is associated with personal health and attitude towards life, rather than objective factors, life style, or life events. We conclude that QOL can be developed independently and thus be used as medicine.     

Industrial policy: The case for national strategies for world markets

This article considers the objectives of an industrial policy that would develop national strategies for world markets. It describes the tools used to implement such strategies and how the strategies would be organized. The author also considers some of the advantages and disadvantages of developing national strategies for world markets.     

Top Management Team Diversity: A Review of Theories and Methodologies

This paper reviews empirical research on top management team (TMT) diversity. A number of scholars have concluded that upper echelons findings, in particular in terms of the consequences of TMT heterogeneity, have been inconclusive. This review conducts an in‐depth analysis of conceptual and methodological issues related to upper echelons diversity studies and offers some directions for future research. Sixty journal articles, published in ten top international journals over a 22‐year period (1984–2005), were analyzed. The results suggest that upper echelons research is increasingly multidisciplinary in nature; however, in‐depth inquiries into the antecedents of TMT composition and the multilevel contextual influences on the implications of TMT heterogeneity are still needed. This review finds that clarity about level of analysis, both theoretically and empirically, remains an important issue in the field and thus a multilevel approach is strongly encouraged. Moreover, the complexity of diversity as a theoretical construct needs to be acknowledged and operationalized accordingly in upper echelons studies.     

Marriage migration: just another case of positive assortative matching?

It is a stylized fact that marriage formation involves positive assortative matching on education. We also find this in the case of immigrants, even when they tend to “import” their spouses and potentially trade off education for other favorable characteristics. For Pakistanis, we find positive compensating differentials in terms of high education to youth having adopted host country norms, when marrying a marriage migrant. This indicates that Pakistani marriage migrants pay a premium to be able to marry and live in Denmark. For Turks, individuals having source country norms pay a premium in order to import a partner, indicating that unspoiled traditional norms are traded off for education.

Kernel density estimation for heavy-tailed distributions using the champernowne transformation

When estimating loss distributions in insurance, large and small losses are usually split because it is difficult to find a simple parametric model that fits all claim sizes. This approach involves determining the threshold level between large and small losses. In this article, a unified approach to the estimation of loss distributions is presented. We propose an estimator obtained by transforming the data set with a modification of the Champernowne cdf and then estimating the density of the transformed data by use of the classical kernel density estimator. We investigate the asymptotic bias and variance of the proposed estimator. In a simulation study, the proposed method shows a good performance. We also present two applications dealing with claims costs in insurance.     

The Use of Telematics Devices to Improve Automobile Insurance Rates

Most automobile insurance databases contain a large number of policyholders with zero claims. This high frequency of zeros may reflect the fact that some insureds make little use of their vehicle, or that they do not wish to make a claim for small accidents in order to avoid an increase in their premium, but it might also be because of good driving. We analyze information on exposure to risk and driving habits using telematics data from a pay‐as‐you‐drive sample of insureds. We include distance traveled per year as part of an offset in a zero‐inflated Poisson model to predict the excess of zeros. We show the existence of a learning effect for large values of distance traveled, so that longer driving should result in higher premiums, but there should be a discount for drivers who accumulate longer distances over time due to the increased proportion of zero claims. We confirm that speed limit violations and driving in urban areas increase the expected number of accident claims. We discuss how telematics information can be used to design better insurance and to improve traffic safety.     

Altruism and efficient allocations in three-generation households

Journal of Risk and Uncertainty - In this paper we test the efficiency of family resource allocation in three-generation households. Understanding how the so-called “squeezed middle”...